The British two pound coin was first issued as a commemorative coin in 1986 to celebrate the Commonwealth Games

Commonwealth Games

The Commonwealth Games is an international, multi-sport event involving athletes from the Commonwealth of Nations. The event was first held in 1930 and takes place every four years....

 in Scotland. Six further commemorative issues followed between 1989 and 1996. These coins did not circulate in large numbers.

After a review of the United Kingdom coinage, it was decided that a general-circulation £2 coin was needed, and a new bi-metallic design was issued on 15 June 1998 (dated 1997).
This was the first bi-metallic coin to be produced for circulation in Britain since the tin farthing with a copper plug produced in 1692, and is the highest denomination coin in common circulation in the UK.